How Cities Use Parks for Economic Development

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How Cities Use Parks for Economic Development

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CITY PARKS FORUM

BRIEFING PAPERS

How cities use parks for...

Economic Development

Executive Summary

Parks provide intrinsic environmental,

aesthetic, and recreation benefits to our cities.

They are also a source of positive economic

benefits.They enhance property values, increase

municipal revenue, bring in homebuyers and

workers, and attract retirees.

At the bottom line, parks are a good financial

investment for a community. Understanding

the economic impacts of parks can help decision

makers better evaluate the creation and

maintenance of urban parks.

Key Point #1

Real property values are positively affected.

Key Point #2

Municipal revenues are increased.

Key Point #3

Affluent retirees are attracted and retained.

Key Point #4

Knowledge workers and talent are attracted to live

and work.

Key Point #5

Homebuyers are attracted to purchase homes.

The City Parks Forum is a program of the American Planning

Association funded by the Wallace-Reader’s Digest Funds

and the Doris Duke Charitable Foundation

American Planning Association

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Economic Development

KEY POINT #1:

Real property values are

positively affected.

More than 100 years ago, Frederick Law Olmsted conducted

a study of how parks help property values. From 1856 to

1873 he tracked the value of property immediately adjacent

to Central Park, in order to justify the $13 million spent on its

creation. He found that over the 17-year period there was a

$209 million increase in the value of the property impacted

by the park.

As early as the 19th century the positive connection between

parks and property values was being made. Olmsted's analysis

shows the real dollar amount impact of parks. His study was

not a unique situation, however. Several studies conducted

over the last 20 years reaffirm his findings, in cities across the

country. Below are more examples of how proximity to a

park setting is connected to property values.

Chattanooga,Tennessee: In the early 1980s this city was

facing rising unemployment and crime, polluted air, and a deteriorating

quality of life.To lure middle-class residents back, local

government, businesses, and community groups decided to

improve the quality of life by cleaning the air, acquiring open

space, and creating parks and trails. As a result, property values

rose more than $11 million, an increase of 127.5 percent.

Atlanta: After Centennial Olympic Park was built, adjacent

condominium prices rose from $115 to $250 a square foot.

As noted on the Centennial Olympic Park website,

“Thousands of people who have made the move to downtown

Atlanta have chosen Centennial Olympic Park as their

front yard.” www.centennialpark.com.

Amherst, Massachusetts:Cluster housing with dedicated

open space was found to appreciate at an annual rate of 22

percent, compared to a comparable conventional subdivision's

rate of 19.5 percent.This translated in 1989 dollars to a

difference of $17,100.

KEY POINT #2:

Municipal revenues are increased.

Another component of the Central Park study was an

assessment of increased tax revenue as a result of the park.

The annual excess of increase in tax from the $209 million in

property value was $4 million more than the increase in annual

debt payments for the land and improvement. As a result of

building Central Park, New York City made a profit.

Increased property values and increased municipal revenues

go hand in hand. Property tax is one of the most important

revenue streams for cities. By creating a positive climate for

increased property values, the tax rolls will benefit in turn. As

shown with Central Park, parks can both pay for themselves

and generate extra revenue. In addition, tax revenues from

increased retail activity and tourism-related expenditures further

increase municipal monies.

Property Tax Benefits

Chattanooga: Improvements in Chattanooga resulted in an

increase in annual combined city and county property tax revenues

of $592,000 from 1988 to 1996, an increase of 99 percent.

(Lerner and Poole, 1999).

Boulder:The presence of a greenbelt in a Boulder neighborhood

was found to add approximately $500,000 in property

tax revenue annually.

Sales Tax Benefits

Oakland, California:The presence of the East Bay Regional

Park District is estimated to stimulate about $254 million

annually in park-related purchases, of which $74 million is

spent in the local East Bay economy.

Shopping Districts: Surveys indicate that prices for products

in districts with trees were on average about 11 percent

greater than in no-tree districts; the quality of products were

rated 30 percent higher than in areas with no sidewalk

landscaping.

Tourism-Related Benefits

Atlanta: Centennial Olympic Park has an estimated 1.5

million visitors each year, attending 175 public events.

San Antonio,Texas: Riverwalk Park, created for $425,000, is

lined with outdoor cafes, shops, bars, art galleries, and hotels,

and has overtaken the Alamo as the most popular attraction

for the city's $3.5-billion tourism industry.

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KEY POINT #3:

Affluent retirees are attracted and

retained.

"There is a new, clean growth industry in America today—

The industry is retirement migration" (Foreward in Longino,

1995, 7).

By the year 2050, according to the U.S. Census Bureau,

approximately 1 in every 4 Americans will be 65 years of age

or older, creating an affluent group of retirees with financial

benefits, including Social Security, military benefits, and pension

plans. With an average life expectancy of between 75 and 83

years, this is a significant population group, both in size and

affluence.

They are also mobile, moving to various locations across the

country—places as diverse as northern Wisconsin and

Michigan, the mountains of Colorado and Montana, and New

England. Members of this mobile retiree cohort have been

termed "GRAMPIES": (Growing [number of] Retired Active

Monied People In Excellent Shape).

GRAMPIES want communities that provide leisure and

recreation amenities. In a study by Miller et al. (1994), a retiree

sample was asked to review 14 features and indicate their

importance in the decision to move.The first three in rank

order were scenic beauty, recreational opportunities, and mild

climate.

Retirees bring expendable income into their communities. If

100 retired households come to a community in a year, each

with a retirement income of $40,000, their impact is similar to

that of a new business spending $4 million annually in the

community. (Crompton, p. 65).

They increase the tax base and are "positive" taxpayers, using

fewer services than they pay for through taxes. For example,

they pay taxes to school districts but do not send children

there.

KEY POINT #4:

Knowledge workers and talent are

attracted to live and work.

"…cities are characterized by a sense of place, beauty in the

natural environment, a mixed-use transportation system and a

24-hour lifestyle.These are the characteristics that will attract

the creativity and brainpower that undergird the new economy."

Steven Roulac, futurist,The Roulac Group.

A significant change has occurred in the American economy.

Industry today is composed of smokeless industries, high technology,

and service-sector businesses, collectively referred to

as the "New Economy." The workers in the New Economy are

selling their knowledge, as opposed to physical labor, as the

main source of wealth creation and economic growth. These

employees, referred to in studies as "knowledge workers" or

"talent," work in a "footloose" sector—companies are not tied

to a certain location in order to achieve a competitive advantage.

What the companies are attached to is retaining their talent

and attracting more talent. As a result, several studies have

been conducted to determine what factors are important to

talent when they are making employment decisions.

A survey of 1,200 high technology workers in 1998 by KPMG

found that quality of life in a community increases the attractiveness

of a job by 33 percent.

Knowledge workers prefer places with a diverse range of outdoor

recreational activities, from walking trails to rock climbing.

Portland, Seattle, Austin, Denver, and San Francisco are

among the top cycling cities; they also are among the leaders

in knowledge workers.

Workers attracted to an area are then positioned

to put money back into the local economy through jobs,

housing, and taxes, which then contribute to parks.

Retirees transfer significant assets into local investment and

banking institutions, expanding the local deposit base that can

be used for commercial and industrial financing.

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KEY POINT #5:

Homebuyers are attracted to

purchase homes.

"Parks, ponds, bike paths." "Nearly five acres of woodland

protected as a nature sanctuary" "My lake…my park…my

home."

All around the U.S. real estate brokers and homebuilders are

advocating parks as one of the top residential selling points.

The desire to live near parks also translates into real dollars.

A 2001 survey by the National Association of Realtors (NAR)

revealed that 57 percent of voters would choose a home

close to parks and open space over one that was not.

In addition, the NAR survey found that 50 percent of voters

would be willing to pay 10 percent more for a house located

near a park or protected open space.

The National Association of Home Builders found that 65

percent of home shoppers surveyed felt that parks would

seriously influence them to move to a community.

According to Economics Research Associates (ERA), a 1991

survey in Denver found that 48 percent of residents would

pay more to live in a neighborhood near a park or greenway.

One of the most popular planned community models today is

golf-course residential development. However, surveys have

shown that the majority of people who live in golf course

communities don't play golf regularly—as many as two-thirds,

according to ERA.They are attracted to the dedicated open

space, the expansive views, and the guarantee that both elements

will stay the same. By promoting, supporting, and revitalizing

urban parks, cities can help attract a significant portion

of the homebuying community.

Resources

Association of Foreign Investors in Real Estate. December 11, 2000. "Ten U.S.

Cities Among 20 in the World Poised to Reap Benefits of New Economy."

Press Release:The Roulac Group.

Center for Urban Horticulture. November 1998. "Trees in Business Districts:

Positive Effects on Consumer Behavior!" Seattle, Wash.: University of

Washington.

Crompton, John L. November 2001. Parks and Economic Development. PAS

Report No. 502. Chicago: APA.

Florida, Richard. January 2000. "Competing in the Age of Talent: Quality of

Place and the New Economy." Prepared for the R.K. Mellon Foundation,

Heinz Endowments, and Sustainable Pittsburgh.

National Park Service. 1995. Economic Impacts of Protecting Rivers,Trails, and

Greenway Corridors: A Resource Book. Washington, D.C.: NPS Rivers,Trails and

Conservation Assistance. Fourth Edition.

Phillips, Patrick L. n.d. ERA Issue Paper: Real Estate Impacts of Urban Parks. Los

Angeles: Economics Research Associates.

Urban Land Institute. 1994. Golf Course Development and Real Estate.

Washington, D.C.: Urban Land Institute.

For further information on this paper, please contact the author, Megan

Lewis, AICP, Assistant Director of The City Parks Forum, 312-786-6363;

mlewis@planning.org

Cover photo: San Antonio Riverwalk, courtesy of Alexander Garvin

Foster, Mary. November 6, 1999. "Better homes have gardens, parks." New

Orleans Times-Picayune.

Handley, John. September 5, 1999. "Gold Medal." Chicago Tribune, Section 16,

Real Estate.

Harnik, Peter. 2000. Inside City Parks.Washington, D.C.: Urban Land Institute.

Lerner, Steve and William Poole. 1999. The Economic Benefits of Parks and

Open Space: How Land Conservation Helps Communities Grow and Protect the

Bottom Line.The Trust for Public Land.

Longino, C.F. Jr. 1995. Retirement Migration in America. Houston:Vacation

Publications.

MacKay, Ned. December 21, 2000. "Putting a price on the value of open

space." Contra Costa Times, Oakland, Cal.

Miller, W., et al. 1994. Retirement In-Migration Study. Mississippi State, Miss.:

Southern Rural Development Center.

City Parks Forum Briefing Papers

This is one in a continuing series of briefing papers on how cities

can use parks to address urban challenges.We hope the information

here helps you to create great urban parks in your city.

Please visit our website at www.planning.org/cpf to learn more

about The City Parks Forum.

Copyright © 2002 by American Planning Association

122 S. Michigan Ave, Suite 1600, Chicago, IL 60603;

www.planning.org.

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